Chesapeake Gold (TSXV:CKG) Poised for Revaluation with Two World-Class Precious Metals Assets in Mexico

• Chesapeake Gold's flagship Metates project in Mexico contains 19M oz gold and 500M oz silver in large-scale open-pittable resource
• The high-grade Lucy gold project in Sinaloa offers near-term exploration upside and potential early cash flow
• Drilling at Lucy has hit significant high-grade oxide gold mineralization amenable to simple heap leach
• Chesapeake was added to the prestigious NASDAQ Global Silver Miners Index, expanding the investor base
• Advancing Metates and Lucy projects in strengthening the precious metals market with an inflation uptick presents a compelling investment opportunity

Two Precious Metals Assets in North America

Chesapeake Gold is advancing two gold and silver projects in North America - the flagship 19 million ounce Metates project in Mexico and the emerging high-grade Lucy gold project in Sinaloa, Mexico. With significant resources delineated and exploration upside, both assets represent potential company-makers for Chesapeake.

Flagship Metates Project Offers Large-Scale Production Potential

The Metates project in Durango, Mexico contains over 19 million ounces of gold and 500 million ounces of silver in measured and indicated resources. This positions Metates among the largest undeveloped gold and silver deposits globally.

"Metates has 500 million ounces of silver in it...we are number one, we're in the top left corner of that chart, and so we're a very large repository of silver." - Jean-Paul Tsotsos, President & CEO

An updated 2021 preliminary economic assessment (PEA) outlined a large-scale, low-cost open pit mining operation producing over 112,000 ounces gold and 2,493,000 ounces silver annually. Ongoing metallurgical test work has achieved up to 60% faster oxidation kinetics, which could significantly enhance heap leach economics at Metates. Further test results on gold and silver recoveries are upcoming.

High-Grade Lucy Project Offers Near-Term Exploration Upside

Recent drilling at the Lucy project in British Columbia intersected high-grade oxide gold mineralization up to 6.19 g/t over 24 meters near the surface. Metallurgical tests achieved excellent recoveries of 95% from cyanide leaching across multiple drill holes, indicating amenability to simple heap leach processing. A current 900-meter, 10-hole drill program aims to expand mineralization along strike and at depth, with assay results expected in the coming months. Significant exploration upside remains to be tested across the project area.

Added to the Prestigious NASDAQ Silver Index

In January 2024, Chesapeake was added to the NASDAQ Global Silver Miners Index. This reflects the enormous silver endowment at Metates. Index inclusion significantly expands Chesapeake's investor audience and provides third-party validation of the company's high-quality assets.

Advancing Projects in a Strengthening Precious Metals Market

• Persistently high inflation coupled with a less hawkish Fed tilt appear supportive for gold and silver prices after a muted 2023 performance. This could re-rate developer valuations higher.
• Chesapeake offers leveraged upside to a rising precious metals market with two world-class assets located in top mining jurisdictions.

The Investment Thesis for Chesapeake Gold

• World-class gold/silver resources: Metates and Lucy together contain over 19.5 million ounces of gold and 500 million ounces of silver, positioning Chesapeake with enormous precious metals leverage.
• Production and cash flow potential: Metates provides a clear path to large-scale gold/silver production, while Lucy could generate early cash flow from a simple heap leach operation.
• High-grade exploration upside: Ongoing drilling and exploration at Lucy aims to expand the current high-grade footprint, providing near-term catalysts for resource growth.
• Tier-one mining jurisdictions: Mexico and Canada offer stable and mining-friendly jurisdictions for Chesapeake's asset development.
• Upside to rising precious metals: Chesapeake offers exceptional leverage to renewed investor interest and higher precious metal prices.

Key Takeaways

With an impressive 19+ million ounce gold-equivalent resource base, district-scale exploration potential, and assets located in top mining jurisdictions, Chesapeake Gold presents a compelling investment opportunity. As the company advances Metates and Lucy towards production, shareholders stand to benefit from Chesapeake's enormous precious metals leverage amid a strengthening gold and silver market backdrop.

Analysis of Precious Metals Macro Outlook

Conditions appear increasingly positive for a sustained up-cycle in precious metals after a prolonged downturn. Persistently high and broad-based inflation has prompted central banks to signal a pause in interest rate hikes after an aggressive tightening campaign in 2022. Meanwhile, geopolitical tensions and global growth concerns could drive safe-haven precious metals demand. This policy pivot and supportive macro backdrop point to an end of the current consolidation phase for gold and silver.

With mine supply plateauing, any resurgence in investment demand could quickly tighten physical precious metals markets. This upside price dynamic will especially benefit leveraged precious metals developers sitting on large-scale deposits. Many quality mining assets were overlooked during the recent capital drought, creating a scarcity of good projects in safe jurisdictions when majors seek M&A opportunities. Well-funded juniors with strategic assets should command sizable premiums.

The opportunity is timely for investors positioning in high-quality but undervalued precious metals developers before the next bull run takes hold. Companies like Chesapeake Gold with multimillion-ounce gold and silver deposits located in Mexico and Canada offer attractive exposure to what appears an impending upswing in precious metals.